HomeMy WebLinkAbout4.12 Fiscal Year 2021-22 4th Quarter Financial Review and Additional Special Designation of General Fund ReservesCELEBRATING
YEMS
1982 - 2022
DUBLIN
CALIFORNIA
STAFF REPORT
CITY COUNCIL
Agenda Item 4.12
DATE: October I8, 2022
TO: Honorable Mayor and City Councilmembers
FROM: Linda Smith, City Manager
SUBJECT: Fiscal Year 2021-22 4th Quarter Financial Review and Additional Special
Designation of General Fund Reserves
Prepared by: Lisa Hisatomi, Director of Administrative Services
EXECUTIVE SUMMARY:
The City Council will receive a financial report on the fourth quarter of Fiscal Year 2021-22
and consider amendments to General Fund reserve designations.
STAFF RECOMMENDATION:
Adopt the Resolution Authorizing Additional Special Designations of General Fund Reserves
for Fiscal Year 2021-22 and confirm additional General Fund reserve designations as of June
30, 2022.
FINANCIAL IMPACT:
City Council confirmation of General Fund reserve designations will not alter amounts
received or spent but will allow Staff to close the Fiscal Year 2021-22 financial books.
Total General Fund reserves are projected at $223.5 million as of June 30, 2022, with $64.6
million in the unassigned cash flow reserve, representing 8.1 months of the Fiscal Year 2022-
23 Adopted General Fund Budget. All other funds comply with policies governing fund
balance.
DESCRIPTION:
This report transmits the preliminary financial results of the Fiscal Year 2021-22 year-end,
focusing on the General Fund. At this time, the numbers are essentially final, and though
adjustments may happen as the audit is finalized, Staff does not expect substantial changes
from the numbers in this report. The Annual Comprehensive Financial Report, which will be
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presented to the City Council at the second meeting in December, will contain the final
audited results.
General Fund Overview (Attachment 2)
General Fund operating revenues totaled $114.2 million in Fiscal Year 2021-22, an increase of
$11.0 million over the prior year. Total revenues, including an accounting adjustment of
unrealized gains and transfers in, were $99.0 million, a decrease of $0.5 million from the prior
year. General Fund operating expenditures totaled $80.9 million, an increase of $6.8 million
from the prior year. Total expenditures, including contributions to other funds and transfers
out, were $85.2 million, an increase of $4.8 million from the prior year. Contributions to
capital projects and other funds totaled $4.3 million, a decrease of $2.0 from the prior year.
The resulting impact on total General Fund Reserves was an increase of $14.0 million, as
shown in Table 1.
Table 1: General Fund Summary
FY 2020-21 FY 2021-22
Total Reserves, Beginning of Year
$190,649,224 $209,764,495
Revenues 103,200,620 114,199,928
Expenditures (74,121,779) (80,931,058)
Net Operating Budget Impact 29,078,842 33,268,870
Transfers In 273,623 312,874
Unrealized Gain/Loss (3,936,480) (15,525,055)(1)
Transfers Out/Contribution to Other (6,300,714) (4,336,114)
Total Reserves, End of Year
$209,764,495 $223,485,070
Change from Prior Year $13,720,575
(1)
Unrealized Loss includes the accounting adjustments of reversing a $4,516,760 unrealized gain in
FY 20-21 and booking an $11,008,295 unrealized loss in FY 21-22.
Specific revenue and expenditure changes (+/-$250,000 compared to Fiscal Year 2020-21
actuals and to the Fiscal Year 2021-22 budget) are discussed below. The General Fund
Summary (Attachment 2) presents this data by major category.
Revenues
Property Tax (+$2,179,303 vs. prior year / +$1,423,388 vs. budget)
Property Tax revenue in Fiscal Year 2021-22 increased along with a gain in net assessed
valuation by $736 million (3.8%) over the prior year. This change is attributed to a 1.036% CPI
adjustment as well as growth in home sales in the City. Transfers of ownership accounted for
over 50% of the increase in assessed value for the year.
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Sales Tax (+$1,596,435 vs. prior year / +$628,903 vs. budget)
Sales Tax revenue came in close to $1.6 million (6.4%) higher than in Fiscal Year 2020-21,
primarily attributed to activity in the Fuel and Service Stations sector with high gas prices,
strong recovery in the Restaurants and Hotels sector, and the overall high level of consumer
spending.
Development Revenue (+$2,411,518 vs. prior year / +$986,561 vs. budget)
This category includes revenues associated with permits for new development (primarily
building permits) as well as tenant improvements on current structures. It also includes fees
for City services, most typically zoning and plan checking services. The increase was due to a
higher level of activity based on development project timelines.
Transient Occupancy Tax (TOT) (+$511,612 vs. prior year / +$255,575 vs. budget)
The City has started to see the recovery of TOT revenue from the COVID-19 pandemic, with an
increase of approximately 69% compared to the prior year. It should be noted that TOT
revenue is only at 60% of the annual average prior to the pandemic.
Other Taxes (+$584,211 vs. prior year / +$1,292,861 vs. budget)
The net increase in Other Taxes over the prior year and current year budget was related to
increases in Property Transfer Tax, which fluctuates with the real estate market, and Garbage
Franchise Tax, due to the incorporation of updated garbage collection rates.
Interest (-$540,382 vs. prior year / +$1,069,289 vs. budget)
Interest earnings came in lower than the prior year, reflective the state of the economic
markets. The Fiscal Year 2021-22 budget for interest was relatively conservative as Staff
anticipated a low interest rate environment during budget preparation.
Rental & Leases (+$825,041 vs. prior year / +$191,049 vs. budget)
Fiscal Year 2021-22 rental revenue reached a new high in facility, field, and sports court
rentals, an increase of over 40% compared to pre -pandemic levels.
Charges for Services (+$3,277,161 vs. prior year / +$2,246,647 vs. budget)
The increase in Fiscal Year 2021-22 compared to the prior fiscal year is attributed primarily to
a significant increase in Parks and Recreation program revenues, as a result of the
resumption of, and robust participation in, the City's recreation programs.
Other Revenue (+$292,648 vs. prior year / +$727,292 vs. budget)
Many revenues in this category are non -recurring in nature, such as Community Benefit
Payments or one-time adjustments. The net increase in Fiscal Year 2021-22 is due to the
reimbursement of our annual fire services retiree health payment, as the plan is super
funded.
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Expenditures
Salaries and Wages (+$1,003,784 vs. prior year /-$1,102,009 vs. budget)
While staffing costs came in lower than budgeted because a number of vacant positions
remained unfilled during the year, seasonal salaries increased from the prior fiscal year due
to the resumption of recreation programs impacted by COVID-19.
Benefits (-$25,916 vs. prior year /-$643,704 vs. budget)
Benefit costs came in lower than the budget because of vacant positions, but also due to lower
retirement costs for employees new to the California Public Employees' Retirement System.
Services and Supplies (+$1,112,251 vs. prior year /-$706,644 vs. budget)
Expenditures for supplies and services in Fiscal Year 2021-22 were higher than the prior fiscal
year due to the re -opening of all City facilities and resumption of recreation programs, as well
as an increase in insurance premiums. The expenditure category came under budget due to
lower than anticipated expenditures in operating supplies, printing, and advertising, and
lower equipment and vehicle maintenance costs.
Utilities (+$112,078 vs. prior year /-$540,101 vs. budget)
Utilities were higher than the prior fiscal year due to the re -opening of all City facilities, but
lower than budget due to a conservative estimate of the annual water rate increase. In
addition, the City utilized less recycled water than anticipated due to drought restrictions.
Contracted Services (+$3,880,744 vs. prior year /-$4,050,018 vs. budget)
Compared to the prior year, contract expenditures came in higher than the prior year mainly
due to planned increases in police services, fire services, and maintenance contract costs. In
addition, development -related contract services costs were higher than the prior fiscal year
based on the timing of development projects, and other contracted services increased due to
the resumption of recreation programs. Both development -related and instructor contract
services costs are offset by revenues.
Compared to the budget, the largest variances were in development services contracts ($1.4
million under budget) due to the timing of development projects, and all other general City
contracts ($2.3 million under budget). General City contracts includes a variety of services
across departments such as: City Clerk (scanning services), City Attorney services,
Administrative Services (sales tax consulting), Public Works (traffic signal consulting and
maintenance, street maintenance, and waste management) and Parks and Community
Services (Alameda County Library contract). Of the amount remaining for general contracts,
approximately $1.1 million will be carried over to Fiscal Year 2022-23 to continue projects
underway.
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Capital Outlay (-$299,234 vs. prior year /-$189,662 vs. budget)
Capital Outlay expenditures are typically one-time in nature, and they vary from year to year.
These purchases were under budget by $189,662 in Fiscal Year 2021-22; of that amount,
$70,000 will be carried over to complete the Public Works Department workspace
reconfiguration.
Debt Service Payment (+$945,285 vs. prior year /-$30,435 vs. budget)
The variance in debt service is attributed to the first -year payment for the Energy Lease
Revenue Bond.
Transfers Out for Capital Improvement Program (CIP) Projects
The General Fund transferred out $3.3 million in Fiscal Year 2021-22 for capital project
expenditures; of that amount, $2.8 Million was covered by Committed/Assigned Reserves.
$12.5 million of the unspent capital project budget will be carried over to Fiscal Year 2022-23.
Table 2 summarizes the CIP projects funded by the General Fund.
Table 2: General Fund CIPs
Project Amount
Committed/Assigned
Civic Center HVAC and Roof Replacement $22,602
Civic Center Rehabilitation 35,998
Don Biddle Community Park 1,424,807
Dublin Heritage Park Cemetery Improvements 1,159,801
Electric Vehicle (EV) Charging Stations 5,128
Green Stormwater Infrastructure 301
IT Infrastructure Improvement 89,323
Maintenance Yard Facility Improvements 354
Public Safety Complex - Police Services Building 65,163
Subtotal - Committed/Assigned $2,803,478
Alamo Creek Park & Assessment Dist. Fence Replacement $3,233
Annual Street Resurfacing 67,957
Audio Visual System Upgrade 859
Citywide Bicycle and Pedestrian Improvements 2,650
Citywide Energy Improvements 60,861
Downtown Dublin Street Grid Network 10,646
Financial System Replacement 303,032
Restrooms Replacement 280
San Ramon Road Trail Lighting 83,117
Subtotal - Undesignated $532,636
Total - General Fund Transfers Out to CIPs $3,336,114
Reserves (Attachment 3)
In June 2022, based on estimated revenues and expenditures at that time, the City Council
approved allocations to specific Committed Reserves and Assigned Reserves, shown in Table
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3 below. With the close of the financial books, Staff is recommending additional allocations as
described below. This Staff Report also transmits a Resolution (Attachment 1) which confirms
designations only of additional Committed Reserves for Fiscal Year 2021-22. City Council
approval of Assigned Reserves is not necessary by resolution.
Committed Reserves
a. Cultural Arts Center - Transfer $2,600,000 from the Fallon Sports Park III Contingency
Reserve.
On September 20, 2022, the City Council approved the transfer of $2.6 million from the
Fallon reserve to the Cultural Arts Center project in conjunction with the award of the
construction contract. With the addition, the total Committed Reserve for the Cultural
Arts Center project is $7,139,197.
Assigned Reserves
a. Pension and OPEB - Increase $1,000,000.
Staff recommends the addition of the budgeted $1.0 million to this reserve to cover
potential future increases in the City's unfunded pension liability, for a total of $17.0
million.
b. Dublin Boulevard Extension - Create a new reserve and set aside $20,000,000.
On August 16, 2022, Staff provided to the City Council an update on the Dublin
Boulevard Extension Project. The preliminary engineering level cost estimate for the
project is currently $151.5 million allocated between the City of Dublin and the City of
Livermore, and it is expected that Dublin's share will be approximately $124.0 million.
Of that amount, $63.0 million and $13.5 million will be funded by the Eastern Dublin
Transportation Impact Fee (EDTIF) and Tri-Valley Transportation Development
(TVTD) Fee respectively, with $47.5 million remaining in unidentified funding.
The project cost included in the updated EDTIF is based on the share of future traffic
volume using the Dublin Boulevard extension that is associated with the EDTIF area
land use. The $63.0 million in EDTIF funding is not expected to be available by the time
the construction phase starts but will be collected over the full buildout of development
in Eastern Dublin. Staff is exploring ways of advancing this funding until it is collected,
by using General Fund surpluses as possible. Staff will present a comprehensive
discussion on the funding plan at an upcoming City Council meeting.
The additional allocation, as well as reserve allocations for budget carryovers and per
accounting rules and/or City policy, have been incorporated into the General Fund Reserve
Balances (Attachment 2).
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Table 3. Committed/Specific Assigned Reserve Recommendations
FY 21-22
June 2022 Q4 Total Adjustment
Reserve Category Approval Adjustment Adjustment Type
Committed
Downtown Public Improvement $2,200,000
Lease Revenue Bond Payoff 2,000,000
One -Time Initiative - Capital 1,500,000
Cultural Arts Center
Fallon Sports Park III Contingency
Assigned
ARPA Revenue Replacement $665,878
Non -Streets CIP Commitments 1,000,000
Pavement Management 2,000,000
Pension & OPEB
Dublin Boulevard Ext. - Placeholder
$2,600,000
(2,600,000)
1,000,000
20,000,000
$2,200,000
2,000,000
1,500,000
$2,600,000
(2,600,000)
$665,878
1,000,000
2,000,000
1,000,000
20,000,000
Add
Add
Add
Transfer
Transfer
Add
Add
Add
Add
Add
With approval of the recommendations above, the Unassigned Cash Flow Reserve is
estimated at $64.6 million (or 8.1 months of the Fiscal Year 2022-23 Adopted General Fund
Operating Budget), which is above the reserve target as provided for in the Fund Balance and
Reserves Policy.
STRATEGIC PLAN INITIATIVE:
Special Designation of General Fund Reserves is directly associated with the Two -Year
Strategic Plan for Fiscal Years 2022-23 and 2023-24.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
The City Council Agenda was posted.
ATTACHMENTS:
1) Resolution Authorizing Additional Special Designations of General Fund Reserves For
Fiscal Year 2021-22
2) General Fund Summary Q4 FY 2021-22
3) General Fund Reserves Summary Q4 FY 2021-22
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Attachment I
RESOLUTION NO. XX — 22
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
AUTHORIZING ADDITIONAL SPECIAL DESIGNATIONS OF
GENERAL FUND RESERVES FOR FISCAL YEAR 2021-22
WHEREAS, the City's Fund Balance and Reserves Policy requires special fund balance
allocations to be adopted by the City Council, and allows the City Council to take action prior to
the end of the fiscal year to direct a specific assignment of the fund balance; and
WHEREAS, Staff reviewed updated information regarding fund balance and estimated
one-time revenues during the preparation of the Fiscal Year 2021-22 Budget; and
WHEREAS, the City Council approved allocations to specific Committed Reserves and
Assigned Reserves on June 21, 2022, based on estimated revenues and expenditures at that
time.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin does
hereby make additional special allocation of the Fiscal Year 2021-22 year-end balance to the
Committed fund balance as follows:
• Transfer $2,600,000 from reserve for Fallon Sports Park III Contingency to Cultural Arts
Center
BE IT FURTHER RESOLVED that, any net resources remaining after special designations,
and after meeting the Fund Balance and Reserves Policy requirements, will be left in the
Unassigned (Available) Reserve.
PASSED, APPROVED AND ADOPTED this 18th day of October 2022 by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
Reso. No. XX-22, Item X.X, Adopted XX/XX/2022 Page 1 of 1
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GENERAL FUND SUMMARY - Q4 FY 2021-22 Attachment 2
Actual
2020-21
Adopted
2021-22
Amended
2021-22
Actual
2021-22
Revenues
Property Tax
Sales Tax
Sales Tax Reimbursements
Development Revenue
Transient Occupancy Tax
Other Taxes
Licenses & Permits
Fines & Penalties
Interest Earnings
Rentals and Leases
Intergovernmental
Charges for Services
Other Revenue
$53,007,086 $52,763,000 $53,763,000 $55,186,388
24,860,469 22,528,000 25,828,000 26,456,903
(219,445) (610,000) (610,000) (346,696)
7,391,926 7,721,318 8,816,883 9,803,444
743,962 750,000 1,000,000 1,255,575
6,441,357 5,732,706 5,732,706 7,025,567
334,852 313,434 313,434 354,643
75,394 107,432 107,432 70,714
2,809,671 1,200,000 1,200,000 2,269,289
822,841 1,020,768 1,456,833 1,647,882
300,618 285,000 285,000 324,519
4,794,938 5,268,891 5,775,452 8,022,099
1,836,951 1,317,231 1,402,307 2,129,599
Subtotal Revenues - Operating
$103,200,620 $98,397,780 $105,071,047 $114,199,928
Transfers In
Unrealized Gains/Losses
$273,623
(3,936,480)
$56,600
$191,116
$312,874
(15,525,055)
Total Revenues
$99,537,763 $98,454,380 $105,262,163
$98,987,747
Expenditures
Salaries & Wages
Benefits
Services & Supplies
Internal Service Fund Charges
Utilities
Contracted Services
Capital Outlay
Debt Service Payment
Contingency & Miscellaneous
$10,666,813
4,754,632
2,782,316
3,685,246
2,399,088
49,039,885
639,176
154,622
$12,772,606
5,372,420
4,110, 511
3,907,323
3,045,467
54, 367, 888
118,677
222,985
$12,772,606
5,372,420
4,601,210
3,907,323
3,051,267
56,970,647
529,605
975,720
133,328
$11,670,597
4,728,716
3,894,567
3,907,323
2,511,166
52,920,629
339,943
945,285
12,832
Subtotal Expenditures - Operating
Operating Impact (REV-EXP)
$74,121,779 $83,917,877 $88,314,127 $80,931,058
$29,078,842 $14,479,903 $16,756,920 $33,268,870
Transfer Outs & Contributions to Other Funds
Transfers Out (CIPs) - Com./Assig. Resery
Transfers Out (CIPs) - Undesignated
Contribution to OPEB/PERS
Contribution to ISF
4,352,208 1,633,905
$948,506 2,404,645
1,000,000
1,000,000 1,000,000
11, 224, 744
4,621,480
1,000,000
1,000,000
2,803,478
532,636
1,000,000
Subtotal - Transfers Out & Contributions
6,300,714
6,038,550
17,846,223
4,336,114
Total Expenditures
$80,422,492 $89,956,427 $106,160,350 $85,267,172
GF Impact (Include CIP & Transfers)
$19,115,271 $8,497,953 ($898,187) $13,720,575
TOTAL GENERAL FUND BALANCE
$209,764,495 $218,262,448 $208,866,308 $223,485,069
Contracted Services Detail
Actual
2020-21
Adopted
2021-22
Amended
2021-22
Actual
2021-22
Police Services
Fire Services (1)
Maintenance Services (MCE)
Development
Other Contracted Services
$20, 731, 301
13,846,016
5,344,843
3,059,578
6,058,148
$22, 294, 777
14,609,570
5,933,838
4,107,935
7,421,768
$21, 788, 548
14, 699, 227
5,933,838
5,259,552
9,289,483
$21,437,403
14,699,226
5,875,493
3,876,551
7,031,956
Total Contracted Services
$49,039,885 $54,367,888 $56,970,647
$52,920,629
(1) Police and Fire liability insurance amounts are not included above, they are included in Services & Supplies.
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RESERVE DESCRIPTION
GENERAL FUND RESERVES SUMMARY- Q4 FY 2021-22
Actual
2020-21
Increase
2021-22
Decrease
2021-22
Net
Change
Attachment 3
Projected
2021-22
Non -Spendable
$13,266
13,266
($2,725)
(2,725)
($231,674)
($2,725)
(2,725)
($231,674)
$10,541
10,541
$4,261,640
60,000
Prepaid Expenses
Restricted
$4,493,314
Cemetery Endowment
60,000
Developer Contribution - Downtown
1,490,000
1,490,000
Developer Contr - Heritage Park
19,000
19,000
Developer Contr - Nature Park
60,000
60,000
Section 115 Trust - Pension
2,114,314
(231,674)
(231,674)
1,882,640
Heritage Park Maintenance
750,000
750,000
Committed
$70,694,542
$8,300,000
($5,648,175)
$2,651,825
$73,346,367
Advance to Public Facility Fee
9,857,639
(334,543)
(334,543)
9,523,096
Downtown Public Improvement
13,000,000
2,200,000
(23,770)
2,176,230
15,176,230
Economic Development
53,319
(53,319)
(53,319)
0
Economic Stability
8,000,000
8,000,000
Emergency Communications
532,113
532,113
Fire Svcs Pension/OPEB
5,671,094
5,671,094
Innovations & New Opportunity
1,031,719
(5,128)
(5,128)
1,026,591
One -Time Initiative - Capital
4,966,110
1,500,000
(46,453)
1,453,547
6,419,657
One -Time Initiative - Operating
503,860
503,860
Public Safety Reserve
2,600,000
2,600,000
Specific Committed Reserves
Cemetery Expansion (CIP)
1,173,549
(1,159,801)
(1,159,801)
13,748
Contribution to Public Facility Fee
6,000,000
6,000,000
Cultural Arts Center (CIP)
4,539,197
2,600,000
2,600,000
7,139,197
Don Biddle Park (CIP)
2,100,000
(1,424,807)
(1,424,807)
675,193
Fallon Sports Park III Contingency
3,110,500
(2,600,000)
(2,600,000)
510,500
Lease Revenue Bond Payoff
4,000,000
2,000,000
2,000,000
6,000,000
Maintenance Facility (CIP)
55,443
(354)
(354)
55,089
Utility Undergrounding (CIP)
3,500,000
3,500,000
Assigned
$66,743,520
$26,031,141
($508,339)
$25,522,802
$92,266,322
Accrued Leave
1,296,514
11,530
11,530
1,308,044
Catastrophic Loss
17,710,320
17,710,320
CIP Carryovers
2,735,111
1,353,733
1,353,733
4,088,843
Fiscally Responsible Adjustment
325,000
325,000
Municipal Regional Permit
2,212,931
(3,153)
(3,153)
2,209,778
Non -Streets CIP Commitments
2,366,100
1,000,000
(89,323)
910,677
3,276,777
Operating Carryovers
1,882,745
(282,199)
(282,199)
1,600,546
Parks and Streets Contingency
201,270
201,270
Pension & OPEB
16,000,000
1,000,000
1,000,000
17,000,000
Relocate Parks Dept
500,000
500,000
Service Continuity
3,150,000
3,150,000
Dublin Blvd Extension - Placeholder (New)
20,000,000
20,000,000
20,000,000
Specific Assigned Reserves
ARPA Revenue Replacement
665,878
665,878
665,878
Climate Action Plan
3,000,000
3,000,000
Contribution to ISF
1,500,000
1,500,000
Facade Improvement Grants
374,157
(9,901)
(9,901)
364,256
HVAC Replace. & Civic Ctr Improv. (CIP)
3,337,009
(58,600)
(58,600)
3,278,409
Pavement Management
2,000,000
2,000,000
2,000,000
Public Safety Complex (CIP)
152,363
(65,163)
(65,163)
87,200
Village Pkwy Pavement Reconstruction
10,000,000
10,000,000
Unassigned
$67,819,852
$6,390,913
($20,610,566)
($14,219,653)
$53,600,199
Unassigned -Unrealized Gains
4,516,760
(15,525,055)
(15,525,055)
(11,008,294)
Unassigned (Available)
63,303,092
$209,764,495
$40,722,054
($27,001,479)
$13,720,575
64,608,493
$223,485,069
TOTAL RESERVES
206